The Zacks Analyst Blog Highlights: Bayer, Allergan, GlaxoSmithKline, Roche and Navigators Group

Zacks Equity Research

For Immediate Release
 
Chicago, IL – October 14, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Bayer ( BAYRY- Free Report), Allergan Inc. ( AGN- Free Report), GlaxoSmithKline ( GSK- Free Report), Roche ( RHHBY- Free Report) and Navigators Group Inc. ( NAVG- Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Friday’s Analyst Blog:

Pipeline Update for Bayer

The HeathCare segment at Bayer ( BAYRY- Free Report) has progressed well with its pipeline in the last few quarters. The company witnessed several product approvals and label expansions. The HeathCare segment provided a brief update on its five new pipeline candidates.

These candidates are selected for accelerated development and are expected to be in phase III studies by 2015. The candidates are currently in phase I and phase II studies.

The first of these candidates is finerenone (BAY 94-8862). Bayer is developing the candidate in a phase IIb study for the treatment of worsening chronic heart failure, as well as diabetic nephropathy. The candidate was found to be effective in reducing cardiovascular mortality in patients suffering from heart failure.

BAY 1021189 is another candidate at Bayer’s targeting the cardiology market. The company intends to initiate a phase IIb study on the candidate in patients suffering from worsening chronic heart failure by year end. Bayer is also developing molidustat (BAY 85-3934) for cardio-renal syndrome.

Molidustat is currently being developed in a phase IIb study for the treatment of patients suffering from anemia associated with chronic kidney disease and/or end-stage renal disease. The candidate performed encouragingly in phase I studies.

Apart from the cardiology segment, Bayer also focuses on the oncology and women’s health areas. Bayer also chose copanlisib (BAY 80-6946), an oncology candidate, for accelerated development. The company is currently evaluating the candidate in a phase II study in patients suffering from non-Hodgkin’s lymphoma. The candidate has performed well in preclinical and phase I studies.

The final candidate under accelerated development is sPRM (BAY 1002670). Bayer is developing the candidate for treating patients suffering from symptomatic uterine fibroids. Bayer expects to initiate a phase III study on the candidate in mid-2014.

Bayer also provided an update on label expansion and further studies on five of its approved products. Bayer’s Xarelto is approved for five indications including stroke prevention in non-valvular atrial fibrillation, deep vein thrombosis (:DVT), pulmonary embolism (:PE) and reducing the risk of recurrent DVT and PE. Xarelto is also being developed for other cardiovascular diseases in phase III studies.

The company is looking to expand labels of oncology drugs Stivarga, anti-cancer drug Xofigo, pulmonary hypertension drug Adempas and eye drug Eylea. We are encouraged by company’s efforts to develop its pipeline.

Bayer, a large-cap pharma company, presently carries a Zacks Rank #2 (Buy) and so does other large-cap companies like Allergan Inc. ( AGN- Free Report) and GlaxoSmithKline ( GSK- Free Report). Meanwhile, Roche ( RHHBY- Free Report) looks more attractive with a Zacks Rank #1 (Strong Buy).

Navigators Group: Strong Buy

Zacks Investment Research upgraded Navigators Group Inc. ( NAVG- Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Navigators Group has been experiencing rising earnings estimates on the back of improved market trends following its robust second-quarter 2013 results. Moreover, strong capitalization and a healthy underwriting profile are deemed impressive.

Additionally, this leading property-casualty insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 116.2%. On Aug 7, Navigators Group reported second-quarter 2013 operating earnings per share of 82 cents, which outpaced the Zacks Consensus Estimate of 76 cents but lagged the year-ago quarter number of 88 cents.

While year-over-year growth of 4.3% in net written premiums boosted the top line, higher-than-expected loss, loss adjusted and operating expenses negated the bottom-line growth. However, underwriting ratios improved, reflected by a combined ratio of 97.7% against 98.1% in the year-ago quarter. Moreover, lower net investment income was more than offset by improved operating cash flow and an appreciated asset position.

Navigators Group consistently focuses on boosting its insurance and underwriting efficiencies through prudent, conservative, yet comprehensive risk management. Meanwhile, reduced debt levels reflect a healthy capital position and financial leverage, which also scores well with the investors and ratings agencies. We foresee steady growth in the future as well.

Based on Navigators Group’s fundamental strength and capital management, the Zacks Consensus Estimate for both 2013 and 2014 inched up 0.6% each to $3.10 per share and $3.44 a share, respectively, in the last 60 days. Furthermore, no downward revision in estimates was witnessed for both the years.

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